(Updated to include company comments starting in the 11th paragraph.)
By Josee Rose
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- The California Public Employees' Retirement System named Cheesecake Factory Inc. (NASDAQ-NMS:CAKE) (CAKE), Hilb, Rogal & Hobbs Co. (NYSE:HRH) (HRH), Invacare Corp. (NYSE:IVC) (IVC), La-Z-Boy Inc. (NYSE:LZB) (LZB) and Standard Pacific Corp. (NYSE:SPF) (SPF) to its 2008 list of underperforming companies due to concerns about corporate governance and poor financial results.
"Besides having sub-par stock performance, these companies refused to address corporate governance issues that have a bearing on how they perform in the market," Calpers, as the biggest U.S. pension fund is known, said in a press release Tuesday.
Calpers has $6 million in holdings in Cheesecake Factory (NASDAQ-NMS:CAKE) , $4.9 million in holdings in Hilb Rogal & Hobbs (NYSE:HRH) , $10.3 million in holdings in Invacare (NYSE:IVC) , $3.5 million in holdings in La-Z-boy (NYSE:LZB) , and $1.5 million in holdings in Standard Pacific (NYSE:SPF) .
Calpers said the five companies underperformed their respective peers and resisted appeals to change the boards. Calpers' asked the companies to make bylaw changes easier, eliminate staggered terms of board members, eliminate restraints on shareholders' voting rights, and allow executive compensation to be recaptured if there is fraud or misconduct.
Calpers said Hilb, Rogal & Hobbs (NYSE:HRH) , Invacare (NYSE:IVC) , La-Z-Boy (NYSE:LZB) and Standard Pacific (NYSE:SPF) should "declassify" its boards so directors will be elected at the same time instead of on a staggered basis. The pension fund also wants Hilb Rogal & Hobbs (NYSE:HRH) to adopt a majority voting policy and a way to recoup executive pay made as a result of fraud.
According to Calpers, La-Z-Boy (NYSE:LZB) agreed to remove its super majority voting requirements and adopt a majority vote for director elections.
Invacare (NYSE:IVC) should also adopt a majority voting policy and Standard Pacific (NYSE:SPF) should eliminate its "super-majority" voting requirements and adopt a majority- voting policy. Calpers said the company agreed to remove some "super-majority" voting requirements, disclose its policy to get back executive pay because of fraud, and disclose its annual equity dilution levels.
Calpers recommended that Cheesecake Factory (NASDAQ-NMS:CAKE) change its "super-majority" requirement to change bylaws and eliminate staggered board terms. The fund also wants the company to adopt a policy to recover executive pay doled out as a result of fraud.
